Question

Round any decimals to the nearest penny.

Secured Unsecured
Credit APR APR
Excellent 4.75% 5.50%
Good 5.00% 5.90%
Average 5.85% 6.75%
Fair 6.40% 7.25%
Poor 7.50% 8.40%

Use the table above for interest rate questions.
Using the credit card from question 13, if you have a good credit rating, how much must you pay at the end of the month to get the balance to the acceptable debt ratio percentage?

Answer 1

I don’t have question 13, so I’m missing the card’s credit limit and current balance (and whether to use the secured or unsecured APR). Please paste question 13 or give those numbers.

Meanwhile, here are the formulas and a quick example so you can finish the problem once you supply the missing numbers.

1) Which APR to use
- For a Good credit rating the table gives: secured APR = 5.00%, unsecured APR = 5.90%. Use the one that applies to your card.

2) Target balance
- If the acceptable debt ratio is R (for example, 30% = 0.30) and the credit limit is L, the target balance T = R × L.

3) Payment required
- If you ignore interest charged during the month and just want the balance at payment time to equal T:
Payment = max(0, Current balance − T)

- If interest is posted before your payment at the end of the month (monthly rate = APR/12), and you want the end‑of‑month balance to be T:
Payment = Current balance × (1 + APR/12) − T

Round the final dollar amount to the nearest penny.

Example (using typical R = 30%, an unsecured Good APR = 5.90%, limit L = $2,000, current balance B = $850):
- T = 0.30 × 2000 = $600
- Monthly rate = 0.059/12 = 0.0049166667
- Interest on B ≈ 850 × 0.0049166667 = $4.18
- Payment = 850 + 4.18 − 600 = $254.18

Send me question 13 (or the limit, current balance, whether to use secured/unsecured APR, and the acceptable debt ratio) and I’ll compute the exact payment.